Recession Continues To Breed New Thinking

Toys R UsIn today’s Wall Street Journal, Toys R Us announced they are opening 350 temporary stores in traditional shopping malls and other locations to take advantage of the holiday season.   This strategy is borne out of two market changes:

  • KB Toys, traditionally a mall-only toy retailer, going out of business
  • Sears expanding their toy department to help grab share from the KB Toys deficit

Holiday sales were down 3.4% last year for Toys R Us. Anticipating similar results for the 2009 holiday season, the national toy retailer realized they could not rely on the same approach to reach customers and drive sales.

Toys R Us is leveraging three key areas:

  • Inexpensive rents – With retail sales down and retailers going out of business, there is excess capacity in shopping malls.
  • Lower pricing – Higher rents were baked into KB Toys’ pricing (so much that they weren’t competitive). Since rents are lower, TRU can keep pricing on par with freestanding stores.
  • Convenience – The convenience of a mall location should attract people who are already shopping versus having to go to another location.

Toys R Us stopped looking at their business the same way.

You should to and see where opportunities might exist to change how you do business.  There has never been a better time to do it.

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2 Comments

Filed under recession marketing

2 responses to “Recession Continues To Breed New Thinking

  1. Cathleen C.

    Brillant – outside the box thinking by TRU. Bet they get better than expected results from the “temporary stores”

  2. I am really impressed… somebody is really thinking.
    We have a TRU store here and the parking lot is usually pretty empty, but when our kids were young enough for me to shop there often, it became really clear that what they offered was selection. If you wanted the best choice, you had to go to Toys R Us. Wonder how they will manage that within a mall shop, which I assume will have less floorspace.
    Doesn’t matter… I agree with Cathleen.. they’ll probably do way better than they are expecting.

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